Think Elon Musk's $1 trillion pay package at Tesla sounds crazy? Just look at how much some S&P 500 CEOs made even as their shares lagged the index.
Eight CEOs, including Adobe's Shantanu Narayen, David Zaslav at Warner Bros. Discovery and Brian Niccol at Starbucks, got pay packages ranking among the top 20 in the S&P 500 in 2024. But at the same time, all their shares lagged the S&P 500's 23.3% gain during the year, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSurge.
"Pay structures directly inform execution and work best when they align with the development and adoption cycle of new disruptive technologies," said Nicholas Colas of DataTrek Research.
Pay For Pain In The S&P 500
Some of the divergences of CEO pay and performance are brutal.
Take Adobe's Shantanu. He hauled in total "as reported" compensation of $52.4 million in 2024. That makes him one of the highest paid people at an S&P 500 company. And yet, shares fell 25.5% in 2024. That lagged the S&P 500's gain by 48.8%.
And investors continue to suffer. The stock's RS Rating is just 8. Surprisingly, though, earnings are OK. Analysts think the company will make $20.60 a share this year, up 12% from 2024. Adobe has an EPS Rating of a strong 91.
Hollywood is home to another pay for pain situation. David Zaslav of Warner Bros. Discovery got paid $51.9 million on an "as reported" basis even as the stock dropped more than 7% last year.
The stock is starting to perk up with an RS Rating of 86. Additionally, profit is seen rising 108% in 2025.
What's Next For The S&P 500?
And that's the thing. Pay as reported in 2024 isn't just for work done in 2024. Starbucks CEO Brian Niccol scored $95.8 million last year. And the stock lagged more than 28% in that time. Investors hope he has more up his sleeve than lame efforts in 2024 to turn around the company.
Timing can be fickle. Microsoft's Satya Nadella, for instance, more than made up for 2024's lagging stock price this year.
Because at some point, investors will demand to make money if their CEO is.
Big Pay, Low Returns
Eight paid S&P 500 CEOs with lagging shares in 2024
| CEO | Company | Ticker | Lag S&P 500 | As Reported Total Executive Compensation |
|---|---|---|---|---|
| Narayen, Shantanu | Adobe | ADBE | -48.7% | $52,390,182 |
| Zaslav, David M. | Warner Bros. Discovery | WBD | -30.4% | 51,918,563 |
| Niccol, Brian R. | Starbucks | SBUX | -28.2% | 95,801,676 |
| Woods, Darren W. | Exxon Mobil | XOM | -15.7% | 44,052,537 |
| Conroy, James G. | Ross Stores | ROST | -13.9% | 47,467,296 |
| Nadella, Satya | Microsoft | MSFT | -11.2% | 79,106,183 |
| Gitlin, David L. | Carrier Global | CARR | -4.4% | 65,734,245 |
| Simon, David E. | Simon Property Group | SPG | -2.5% | 61,394,770 |
